XML 28 R17.htm IDEA: XBRL DOCUMENT
v3.20.2

SUBORDINATED DEBENTURES | 6 Months Ended
--- | ---
Jun. 30, 2020
SUBORDINATED DEBENTURES |
SUBORDINATED DEBENTURES | NOTE 8 – SUBORDINATED DEBENTURES Five subsidiary business trusts of the Company have issued floating rate capital securities (“capital securities”) which are guaranteed by the Company. The Company owns all of the outstanding stock of the five subsidiary business trusts. The trusts used the proceeds from the issuance of their capital securities to buy floating rate junior subordinated deferrable interest debentures (“debentures”) issued by the Company. These debentures are the only assets of the trusts and the interest payments from the debentures finance the distributions paid on the capital securities. The debentures are unsecured and rank junior and subordinate in the right of payment to all senior debt of the Company. The trusts are not consolidated in the Company’s financial statements. The carrying value of subordinated debentures are summarized as follows:
|  | June 30, 2020 |  | December 31, 2019
|  | (dollars in thousands)
Heartland Bancorp, Inc. Capital Trust B |  | $ | 10,310 |  | $ | 10,310
Heartland Bancorp, Inc. Capital Trust C |  |  | 10,310 |  |  | 10,310
Heartland Bancorp, Inc. Capital Trust D |  |  | 5,155 |  |  | 5,155
FFBI Capital Trust I |  |  | 7,217 |  |  | 7,217
National Bancorp Statutory Trust I |  |  | 4,624 |  |  | 4,591
Total |  | $ | 37,616 |  | $ | 37,583
The National Bancorp Statutory Trust I debenture was assumed through a business combination and has a contractual obligation of $5,773,000. The interest rates on the subordinated debentures are variable, reset quarterly, and are equal to the three-month LIBOR, as determined on the LIBOR Determination Date immediately preceding each Distribution Payment Date specific to each subordinated debenture, plus a fixed percentage. The interest rates and maturities of the subordinated debentures are summarized as follows:
|  |  |  |  | Interest Rate at |  |
|  | Variable |  | June 30, |  | December 31, |  | Maturity
|  | Interest Rate |  | 2020 |  | 2019 |  | Date
Heartland Bancorp, Inc. Capital Trust B |  | LIBOR plus | 2.75 | % | 3.97 | % | 4.74 | % | April 6, 2034
Heartland Bancorp, Inc. Capital Trust C |  | LIBOR plus | 1.53 |  | 1.84 |  | 3.42 |  | June 15, 2037
Heartland Bancorp, Inc. Capital Trust D |  | LIBOR plus | 1.35 |  | 1.66 |  | 3.24 |  | September 15, 2037
FFBI Capital Trust I |  | LIBOR plus | 2.80 |  | 4.02 |  | 4.79 |  | April 6, 2034
National Bancorp Statutory Trust I |  | LIBOR plus | 2.90 |  | 3.21 |  | 4.79 |  | December 31, 2037
The distribution rate payable on the debentures is cumulative and payable quarterly in arrears. The Company has the right, subject to events in default, to defer payments of interest on the debentures at any time by extending the interest payment period for a period not exceeding 10 quarterly periods with respect to each deferral period, provided that no extension period may extend beyond the redemption or maturity date of the debentures. The capital securities are subject to mandatory redemption upon payment of the debentures and carry an interest rate identical to that of the related debenture. The debentures maturity dates may be shortened if certain conditions are met, or at any time within 90 days following the occurrence and continuation of certain changes in either tax treatment or the capital treatment of the debentures or the capital securities. If the debentures are redeemed before they mature, the redemption price will be the principal amount plus any accrued but unpaid interest. The Company has the right to terminate each Capital Trust and cause the debentures to be distributed to the holders of the capital securities in liquidation of such trusts. Under current banking regulations, bank holding companies are allowed to include qualifying trust preferred securities in their Tier 1 Capital for regulatory capital purposes, subject to a 25% limitation to all core (Tier 1) capital elements, net of goodwill and other intangible assets less any associated deferred tax liability. As of June 30, 2020 and December 31, 2019, 100% of the trust preferred securities qualified as Tier 1 capital under the final rule adopted in March 2005.

X
- References No definition available. + Details
Name: | us-gaap_SubordinatedBorrowingsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for borrowings under subordinated debt agreements that qualify as available in computing net capital under SEC's uniform net capital rule, including restrictive covenants, collateral, interest rates and due dates, amounts due by date and amount owed in total. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 470 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6479118&loc=d3e64650-112822 + Details
Name: | us-gaap_SubordinatedBorrowingsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration